Telecom Italia (TIT) investor relations material

Executive summary

• Achieved all 2025 guidance targets for the fourth consecutive year, with strong results in both Italy and Brazil, reinforcing operational discipline and market credibility.

• Implemented new governance and overhauled capital structure, supporting efficiency, flexibility, and shareholder alignment.

• Resolved a 20+ year legal dispute on the 1998 concession fee, with €1bn compensation recognized in 2025 EBITDA as non-recurring income.

• Transformation plan delivered significant cost savings and improved operational efficiency.

• 2026 guidance and growth trajectory confirmed, with a Capital Markets Day planned post-summer for further updates.

Financial highlights

• 2025 group revenues rose 2.7% to €13.7bn, with domestic up 1.9% and Brazil up 4.6%; service revenues grew 3.5% to €12.86bn.

• EBITDA After Lease increased 6.5% to €3.7bn, with margin expansion in both geographies.

• CapEx at €1.9bn, 13.9% of revenues, with disciplined investment and efficiency gains.

• Equity Free Cash Flow After Lease reached €0.7bn, exceeding targets and reversing a negative prior year.

• Net Debt After Lease at €6.85bn, leverage at 1.86x, supporting deleveraging objectives.

Outlook and guidance

• 2026 group revenues expected to grow 2%-3%, EBITDA After Lease up 5%-6%, and CapEx/revenue to remain below 14%.

• Equity Free Cash Flow After Lease targeted at €1.8bn, including license fee compensation; €0.9bn excluding concession fee and one-offs.

• Leverage to stay below 1.7x, with further flexibility from concession fee and Sparkle disposal.

• Shareholder remuneration to include ~70% of Equity Free Cash Flow After Lease (net of concession fee and Brazil minorities), dividend of ~€0.5bn, and buyback post-Sparkle disposal.

• TIM Brasil targets 5% service revenue growth, 6-8% EBITDA growth, and 11-14% growth in EBITDA AL minus CapEx for 2026.